Consumer sentiment falls sharply

Consumer sentiment fell sharply in September as fears about the economy, the Budget and personal finances weighed on consumers.

The KBC Bank Ireland/ESRI consumer sentiment index fell from 70 in August to 60.2 last month.

The decline reversed most of the improvement seen through 2012 with the Sentiment Index now back at its weakest level since last February.

"For most of the past nine months, the improvement in sentiment reflected a gradually broadening view that the worst might be over. The September survey results suggest consumers are no longer sure that is the case," KBC chief economist Austin Hughes said.

Intense media speculation on a range of potentially very painful Budget adjustments together with a couple of other negative economic developments unnerved Irish consumers, he added.

Retail Excellence Ireland, Ireland’s largest industry trade body, also said on-going budget speculation was to blame for the sharp deterioration in consumer sentiment.

"The sharp deterioration in consumer sentiment in September is no surprise considering the significant amount of budget speculation leading to consumer fear and reduced spending. It is important that Government only comment when a decision is made and that commentary is made with clarity and authority," David Fitzsimons, CEO Retail Excellence Ireland said.